Inaugural Forum: Hong Kong Cross-Border E-Commerce 2016

E-Trading Trends and Opportunities in Free Trade Zones Explored

15 April 2016– Since the Central Government in Beijing began implementing the “Internet Plus” strategy last year, cross-border e-commerce has been developing at an accelerating pace. In response to this trend, the International ICT Expo (13-16 April), organised by the Hong Kong Trade Development Council (HKTDC) at the Hong Kong Convention and Exhibition Centre, has incorporated a number of new elements related to e-commerce. Among them is the inaugural “Hong Kong Cross-border e-Commerce Forum 2016” (14 April), which invited a number of industry experts to discuss the opportunities and challenges under the theme of “Statistics of cross-border e-commerce”. The three-in-one platform for payment, shopping and logistics for cross-border e-commerce businesses was the focal point of the forum.

Strengthening supply chains to enhance competitiveness
At the forum, Vice Chairman of the HKCBEA, Clement So, unveiled the “Initial Report on the Studies of Hong Kong Cross-border E-Commerce”. He stated that Hong Kong’s e-commerce has thrived due to the city’s extensive experience in this sector thanks to a conducive free trade environment, as well as its diverse range of brands. He predicted that online shopping will continue to grow rapidly this year, and suggested that young people acquire a broader understanding of global market trends. Meanwhile, the government should allocate more resources to formulate relevant industry standards and offer assistance to small- and medium-sized enterprises, which would strengthen the city’s supply chain and the niche sectors of various industries.

Tremendous growth potential for Sino-Russia e-commerce
General Manager and Chief Operating Officer of the Beijing-based PayEase, Kino Kwok, noted that use of the Internet is increasingly popular in the Chinese mainland and Russia. While the total transaction amount of online sales reached US$10.5 billion, retail accounted for just two per cent of the total figure, with only 50 online shopping websites recording a total transaction amount of RUB4 billion or above. This points to tremendous room for growth for cross-border e-commerce in Russia. As well as introducing the China-Russia e-commerce platform TradeEase, he also spoke of different channels for developing business in the Russian market such as using localised text, employing Russian experts to oversees logistics, owning local servers, offering local customer service to increase customer loyalty, and utilising both online and offline marketing.

Pros and cons of new policy on cross-border commerce
Senior Business Development Manager of PayEase, Edwin Ma, pointed out that the Chinese government announced its new policy on cross-border e-commerce on 8 April. In addition to analysing the difference between the old and new policies, he also addressed the issues presented by the new policy. “‘The Cross-border E-commerce Retail List of Imported Goods’ was published at 9pm, 7 April, though it was implemented at the midnight of 8 April,” said Mr Ma. “Consequently, goods that were already in the bonded area at the time of its announcement, but not included on the list, were not allowed to leave the area. Those goods with an imminent use-by date were to be destroyed.” He also offered his analysis on other policy changes related to imports, such as tax rates.

Key to success
Speaking on the subject of “Cross-border O2O Integrated Solutions Plan,” Sha Qingping, Chairman of Rennibi E-commerce Technology Ltd based in Qianhai, Shenzhen, explained that a company’s cross-border e-commerce platform is comprised of 12 sub-systems. He spoke about the 12 steps of founding a cross-border e-commerce company, from registration to launching its e-commerce channels. He also discussed the distribution models of cross-border e-commerce businesses including “tiered distribution”, “distribution for multi-channeled orders” and “customs verification of customer order, payment processing and logistic information”. He concluded that the key to cross-border e-commerce success lies in “the joining of forces to seize business opportunities”.

Privacy and security of mobile app downloads
In spite of rapid technological advancement, the issues of privacy and security of mobile apps are often overlooked. As Jerald Ray, Executive Vice President for Asia Pacific of Tech Star Communication Ltd remarked, the use of mobile messaging apps and the download of mobile apps involve issues of privacy and security. He also pinpointed the significant risk in users granting apps permissions when they download mobile apps. “It’s like putting your life in someone else’s hand,” he said.

Qianhai to become a smart port
In her remarks, Huang Lifang, Assistant General Manager of Qianhai International Liaison Services Ltd, spotlighted the procedures of company registration in Qianhai and offered her thoughts on “Opportunities in Cross-border E-commerce in Qianhai”. She stressed that “Qianhai seeks not to replace Hong Kong, but to add value to it.” She noted that Qianhai is striving towards becoming a “smart port”. At present, 3,000 Hong Kong enterprises are based in Qianhai, with the 15 per cent tax rate being the most attractive incentive. Financial subsidies and talent matching services in Qianhai also bring various benefits to Hong Kong enterprises.

Defining Free Trade Areas
Drawing on his experience, Former Grade Three Customs Overseer of the General Administration of Customs, Bao Huazha, elaborated on the differences between the three types of free trade areas, including free trade area (broadly defined), free trade zone (narrowly defined) and special customs supervision areas, as mentioned in the Third Plenary sessions of the Central Committee and in the “Free Trade Area and Special Customs Supervision Areas”. He concluded by discussing the special areas, e-commerce and the impact of tax adjustment.

Zero Tolerance of counterfeits vital to e-commerce success in China
With its rapid upswing, the total value of online retail sales in the mainland reached Rmb 3,800 billion in 2015. The forum invited Han Cong, Business Division General Manager of jd.hk (Clothing and Household Goods), which is owned by the world’s ninth-ranked online shopping website JD.com, to share her insights on the topic of “Breakthrough in 2016”. She said that jd.hk regards quality assured products as the key to success. To guard against counterfeits among its offerings, the company launches and enforces a number of “zero tolerance” initiatives every year, including irregular inspection and rigorous supervision of sourcing channels.

The “Hong Kong Cross-border e-Commerce Forum” brings together a number of industry experts to discuss the related opportunities and challenges under the theme of “Statistics of cross-border e-commerce”